Three Surprising Ways IoT is Saving Hotels Money
By Alec Massey
Last updated March 16, 2022
4 min read
To say the hotel industry has been through a lot in the past 24 months is an understatement. While the projected 2022 occupancy rate of 61.7% is a significant improvement from 2020 and 2021 levels, it will remain below pre-pandemic levels that hovered in the mid-60s for the 7 year period spanning from 2014-2019. However, average daily rates are expected to nearly equal pre-pandemic highs from 2019, after strong rebounds in 2021 and 2022, and as a result, . RevPAR is projected to reach 93% of 2019 levels in 2022. The tumultuous 3 year period, despite the gradual and controlled recovery that is underway, has led hoteliers to prioritize cost saving initiatives to stabilize their bottom line.
In addition, a slow return to work for hotel staff has also been a catalyst for operational changes in the industry, with greater priority placed on technology that enables improved efficiency and productivity. In late 2021, unemployment for the hotel sector reached 12.9% compared to the national rate of 4.6%. The strong job creation to start 2022, where the industry added approximately 150,000 jobs in January, demonstrates how the industry had to adapt to do more with less during the rebound that has been underway over the last 12 months.
Less staff, coupled with steadily increasing numbers of guests during the recovery, has made it more difficult to deliver the same level of service, safety, and maintenance upkeep that hotels delivered pre-pandemic. With hoteliers needing to do more with less, recent investments in the Internet of Things (IoT), and geolocation platforms in particular, have shown to be an unexpected source of value. From sensors to trackers to rapid response buttons to smart cameras, IoT - and geolocation platforms in particular - are helping hotel staff feel safer, achieve greater productivity, and reduce waste in support of environmental, social and governance (ESG) targets - all resulting in cost savings to the hotel.
Increase staff retention rates by helping them feel safer
Led by The American Hotel & Lodging Association (AHLA) and the 5-Star Promise, hoteliers continue to make strong commitments to safety and security standards for the industry, including moving at scale to deploy employee safety devices in hotels across the country. At the same time, local governments are legislating, and unions are supporting improved employee safety conditions. In pre-pandemic times, properties may have had two to three room attendants per floor. Due to staffing level adjustments during the pandemic, now, hotels may only have one. Less staff on duty can make it harder to deliver guest services. And it’s also an increasing concern to employee safety, and this can impact employee retention.
Rapid response buttons enabled by IoT geolocation platforms allow staff to send alerts and call for security assistance when needed. Location-based data pinpoints exactly where they are––helping managers and security personnel respond quickly when needed. We see these systems being used almost every day across our clients. When employers deploy measures to help their employees feel safer, staff feel more secure and more valued, which can lead to higher retention rates and reduced costs associated with turnover and recruiting.
Achieve Productivity Gains by Automating Time Consuming Tasks
While most hotel staffs shrank during the pandemic, the size of the hotels didn’t––the same number of exit doors need to be monitored, the same number of luggage carts need to be accounted for each day, and the same number of gauges and meters need to be checked as frequently as they were pre-pandemic. Fewer people means that these jobs must be performed more efficiently, and IoT is enabling this transition.
We’re seeing a wide range of IoT applications deployed to enable greater hotel employee efficiency, including:
- Asset tracking: instead of spending time searching for moveable assets (luggage carts, cots, construction materials, ladders, etc.) that aren’t where they’re supposed to be, asset locations can be tracked real-time on a mobile optimized dashboard.
- Door sensors: exterior doors can be propped open creating unsecured access points to back of house areas. Instead of walking the perimeter to manually check all doors, wireless door sensors can alert based on configurable rules to notify hotel teams when particular doors need to be opened or closed.
- Utility and equipment gauges: whether on a utility meter, boiler, or a filter, there are gauges spread from roof to basement in most hotels that require frequent checks. Camera based technology is starting to automate this cumbersome job, while also providing early alerting when thresholds are breached.
- Temperature and humidity monitors: ranging from freezers that store food to exterior walls that are susceptible to changing outdoor humidity levels, climate monitoring sensors save staff time by automating frequent checks and can prevent spoilage or expensive remediation.
- Leak detection: pipes leak and equipment breaks as frequently today as it did pre-pandemic, but monitoring for these incidents is harder with reduced staff. Wireless leaks sensors and other equipment monitors are providing fast alerting when leaks are sprung, and can even be used to give early indicators for a critical piece of equipment that is trending in a negative direction.
Many of these use cases are easy add-ons when small investments are made in geolocation platforms that include an indoor IoT network, and these applications are becoming a new source of efficiency––and cost savings––for hoteliers as we emerge from the pandemic.
Reduce Energy and Waste––and Costs
Much of the hospitality industry is looking at ways to achieve sustainability and other environmental, social and governance (ESG) targets, and IoT can be a key enabler for reduced consumption of scarce resources. Automating real-time utility reading has been a decades-long challenge for the industry, with key challenges being the diversity of water, gas, and electric meters, and getting reliable and affordable connectivity to them. IoT is now able to overcome these impediments, allowing hotels to accurately capture, track, benchmark, and manage consumption like never before.
Similarly to the efficiency applications noted above, these applications can leverage IoT platforms that are already being deployed in hotels today––including long range IoT networks that help solve the connectivity challenge presented from meters located throughout most hotels.
IoT will continue to play an increasing role in hotel operations coming out of the pandemic
The hospitality industry is on the road to recovery, and one of the lasting impacts of the last few years will be how the pandemic related challenges altered hotel operating models moving forward. Doing more with less has become the new normal and IoT - including geolocation platforms - are a significant component of this change.